- Advice for Sole Traders and Contractors
- Download bank transactions every month, quarter
- Frequently asked questions
- Present your accountant with proper records
- Ask for advice before making big decisions
Present your accountant with proper records they can work with
When it’s time to lodge your return, you should bring your records in a form which is easy to review and check. If you present with a a Cash Receipts and Payments Book or conventional accounting reports such as Trial Balance, Profit and Loss Statement, Balance Sheet and Bank Reconciliation Statement then your accountant is more likely to rely on your records and get straight to work.
You can discuss this with us or your bookkeeper if you need assistance.
For most contractors our free Excel cashbook templates work very well, as they allow totals to be easily checked and expenses to be categorised. You can use them to record all cash and bank transactions in chronological order. We use data-sort and auto-sum functions in Excel for quick and accurate totals. For those who would rather spend a little money to save time, our BankLink service is fantastic for automatic recording of your bank transactions into accounting software throughout the year.
If you rock up with a pile of papers which need to be sorted through, it’s going to take a lot longer and cost a lot more to get your return prepared. If you do the opposite and just bring some totals written down then we may have to ask you to show how you arrived at those totals. This is especially true if you have high expenses, more expenses than income, or no workings and receipts to support your totals. As a registered tax agent, we must take reasonable care in ascertaining your state of affairs before making a statement on your behalf. That means we need to see how you prepared your records.
How do my BAS’s and tax return relate?
If you are GST registered, the income and expense amounts in your tax return are net of GST. Be aware that if the figures in your tax return don’t reconcile with your BAS’s – or indicate under-declared income or GST – it could raise a red flag to the ATO. So if you do your own BAS’s you should carefully check your annual totals against your BAS summaries before seeing us for your tax return. Tell us if you think there may be a discrepancy and ask us for help with a BAS revision if necessary.
Record every expense you think is allowable and be prepared to discuss it
We can only include deductions we know about. Record and clearly describe everything that is deductible to the best of your knowledge and let us exclude what you can’t claim. Highlight any expenses you’re not sure of. If you don’t ask, and we don’t know, then it’s not going to happen. By the same token, not all expenses can be claimed. Sometimes we need to be able to frame an argument, or apportion between your private and business usage. This is one way our expertise can help you greatly.
Whether you can claim a deduction rests on the general principle of how a specific matter of law is applied to your individual circumstances. It depends on what you do to earn income and how that expense relates to it. Tax law is not always fair, logical or intuitive. But your accountant should enjoy explaining to you how to get the best result legally possible!
Try to manage your affairs throughout the year
You are more likely to have accurate records if you maintain them as you incur costs and earn income over the course of the year. If that becomes hard to manage, it may be time to start working with a bookkeeper. We can introduce you to a suitably qualified bookkeeper/BAS agent or offer our services.